The latest Markit/CIPS UK Construction Purchasing Managers’ Index  for July jumped to 57 from 51 in May.

Any number above 50 represents a rise in the market and July’s figure was the third monthly rise in a row.

Residential work led the way but increases were recorded across all sectors.

Increased volumes of new work contributed to a further upturn in construction firms’ confidence about the 12-month business outlook as the degree of positive sentiment reached its strongest since May 2010.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “Homes are the beating heart of this rapid recovery in the construction sector, backed by a solid expansion in civil engineering and commercial activity.

“Better economic conditions, a jump in new business activity and the strongest level of confidence since the era of austerity began in 2010, strongly suggest this growth can be sustained into Q3.

“This rising confidence goes hand in hand with increasing output, underpinned by the expansion in new business orders, which was the steepest since April 2012.

“As a result, firms are starting to believe this is the real deal for the recovery, demonstrated by the strongest pace of job creation since December 2011.

“One constraint on the sector is the pressure on suppliers to meet the sharp rise in demand. Suppliers have been surprised by the speed and scale of the revival leading to lengthy delivery times due to a shortage of capacity based on hard learnt lessons over the past few years.

“This will be something to watch in the coming months.”

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI said: “July’s survey highlights a new wave of optimism across the UK construction sector, with companies reporting a pace of expansion in excess of anything seen over the past three years.

“The swing back to output growth broadened to include commercial and civil engineering activity during July, although housing construction remains the one thing crucial to the sector’s strong upturn at present.

“Construction firms saw the fastest improvement in new orders for over a year, which helped kick-start job creation and input buying growth during July.

“A switch to sharply rising purchasing activity may have caught some suppliers by surprise, as delivery times lengthened to the greatest degree in over seven years.”

Simon Rawlinson, Head of strategic research, EC Harris said: “Unexpectedly strong PMI construction figures for July reflect the strength of the resurging housing market.

“It’s a very welcome sign for the industry, giving improved prospects for employment and manufacturing.

“The return to stronger output in infrastructure is also welcome and sets the foundation for a potentially strong end to 2013.”